American exports just hit an all-time high. Unfortunately, protectionists in Washington want to make sure this great achievement never happens again: They appear ready to let Trade Promotion Authority (TPA) die.
The Commerce Department recently reported that sales of U.S. products to foreign buyers hit nearly $130 billion in April. Never before has the United States sold so many American-made goods in a single month.
The Washington Post called the figure an “unexpectedly large improvement” driven by sales of soybeans, aircraft, and machinery. Most experts actually had predicted a decline in exports.
A sensible American trade policy would build upon April’s solid success, making sure that more record-breaking months are ahead. One of the best ways to accomplish this, of course, is to negotiate trade agreements with other countries that improve our access to overseas markets.
“With each new trade agreement reached and implemented, barriers around the world to U.S. exports fall and opportunities for export growth are enhanced,” said U.S. Trade Representative Susan Schwab.
Yet there won’t be any new trade agreements if Congress lets TPA die at the end of this month. That’s because TPA is an essential legislative tool: It guarantees that trade pacts receive an up-or-down vote in Congress. Without it, politicians have the power to second-guess American trade negotiators and essentially rewrite existing agreements through the amendment process. It’s a recipe for failure.
TPA preserves the right of Congress to accept or reject (not nitpick / amend) trade deals. At the same time, it empowers the office of the U.S. Trade Representative to negotiate with genuine authority. In practice, the Trade Representative discusses ongoing negotiations with congressional leaders to make sure that their concerns are addressed. When a deal is struck, it has received substantial input from legislators. Then it moves through Congress under the rules of TPA.
Without these rules, trade agreements are vulnerable to legislative mischief, especially from lawmakers who want to torpedo these agreements because they don’t think Americans can compete in the global economy. The bottom line is this - trade agreements don’t make it through Congress without TPA.
In the absence of TPA, most foreign governments won’t even bother to try and negotiate trade agreements with the United States. It would be hopeless. We’ve been there before. They know that trade talks won’t lead to concrete results, and so they refuse to waste their time.
And who can blame them? The existence of TPA is like a sign in the window of the U.S. Trade Representative’s office that says “open for business.” Without it, USTR might as well put up a sign that says “closed.”
Ideally, Congress should make TPA permanent. But another temporary extension is far more desirable than simply letting TPA disappear.
The loss of TPA will essentially end the World Trade Organization’s Doha round. A recently-forged agreement with South Korea would wither and the negotiated agreement with Columbia isn’t safe either.
Foreign trade will of course continue in the absence of TPA. The value of U.S. exports may even rise, especially if the dollar remains weak compared to other currencies. But our exports won’t grow as rapidly as they could. Nor will the jobs generated by exports.
Our long-term economic interests require other countries to lower their barriers to American-made products, and that simply won’t happen without TPA. Other countries will continue to ratify trade agreements and they’ll pick up export opportunities that should have been ours.
Farmers stand to lose out more than most. About one-third of what we grow is sold abroad. (Two crop rows out of five are sold to an export market) At the same time, agricultural tariffs tend to be much higher than tariffs for other types of products.
Not only would farmers appreciate more record-breaking months of exports--we could play a crucial role in helping to make them happen. But it will require a form of leadership in Washington that rejects the economic isolationism of protectionists and chooses to engage with a world that is eager to buy what we grow and sell--if only we’ll do what it takes to make them available.
Dean Kleckner, an Iowa farmer, chairs Truth About Trade & Technology. www.truthabouttrade.org
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American exports just hit an all-time high. Unfortunately, protectionists in Washington want to make sure this great achievement never happens again: They appear ready to let Trade Promotion Authority (TPA) die.
